Feeds

Sun kicks off fiscal '05 with a $174m loss

Damn you, Kodak!

  • alert
  • submit to reddit

The essential guide to IT transformation

Sun Microsystems muddled through its first fiscal quarter of 2005, falling back into the red after the briefest of visits to profit country at the end of its last fiscal year.

Sun's total revenue rose just 4 percent year-over-year to $2.6bn in the first quarter. This gain, however, was offset by Sun's $174m net loss in the period. Analysts weren't looking for a profit, but Sun has been hoping to string together a couple of profitable periods for some time now. Sun had posted its first profit in ages just three months ago on the back of its lucrative settlement with Microsoft.

While Sun wasn't able to post consecutive profits, it obviously did post year-over-year revenue growth for the second quarter in a row. This came despite a slowdown in spending from key government and telecommunications customers.

"The team worked really hard and executed on what is usually our toughest quarter," said Sun's CEO Scott McNealy during a conference call.

The biggest driver for Sun's year-over-year gain came from the services side of the house. Services revenue jumped from $902m in last year's first quarter to $952m this year. Hardware and software sales reached $1.67bn this quarter compared to $1.63bn in last year's Q1.

Sales in the US and Japan fell 5 percent and 1 percent, respectively. Europe, however, gave Sun a boost with sales jumping 18 percent year-over-year.

Overall, Sun executives delivered a pretty standard message about what to expect in the coming quarters. The company plans to be very aggressive with its new line of Opteron servers. In addition, Sun touted its continued rollout of UltraSPARC IV processors across the SunFire server line and the upcoming release of the Solaris 10 operating system, which is due out by year end.

Sun also continued to lob repeated attacks against HP. It reckons HP's customer base is hungry for non-Itanium, non-HPUX servers.

"We are definitely seeing a weakening in HP's install base," said Sun's President Jonathan Schwartz.

In its first quarter, Sun took an $82m charge for its settlement with Kodak over Java patent issues and a $108m charge for workforce and real estate reductions. Sun added that its second quarter will be impacted by $300m in restructuring charges and costs related to an audit by the US IRS (Internal Revenue Service).

Excluding this quarter's charges, Sun would have posted a small profit, and investors seemed pleased by this news. Sun's shares were up close to 4 percent to $4.11 in the after-hours markets, at the time of this report. ®

Related stories

Compaq's servers save HP from enterprise sales hell
AMD turns profit on strong 64-bit chip sales
Sun settles Java spat with Kodak for $92m
Sun carves off a few more UK, US workers
Sun does dancing bear act for Wall Street
IBM mocks Itanium server sales - again
Sun downsizes revenue results

Next gen security for virtualised datacentres

More from The Register

next story
BBC: We're going to slip CODING into kids' TV
Pureed-carrot-in-ice cream C++ surprise
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Twitter: La la la, we have not heard of any NUDE JLaw, Upton SELFIES
If there are any on our site it is not our fault as we are not a PUBLISHER
Facebook, Google and Instagram 'worse than drugs' says Miley Cyrus
Italian boffins agree with popette's theory that haters are the real wrecking balls
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?